To pay for the two-month payroll tax cut, a small fee will be levied for a decade on all mortgages sold to Fannie Mae and Freddie Mac. That also makes it harder to overhaul the housing finance system.

A sale pending sign sits outside a home in San Rafael, Calif. The new mortgage… (Justin Sullivan, Getty…)

Reporting from Washington — The new mortgage fee to fund the temporary extension of the payroll tax cut could damp the still-sluggish real estate market and complicate efforts to overhaul the nation's wounded housing finance system.

Even though the tax cut approved Friday extends for only two months, a small fee on loan amounts will be levied for a decade on all mortgages sold to housing finance giants Fannie Mae and Freddie Mac, which control about 60% of the nation's mortgage market.

That fee arrangement also makes it difficult for Congress to work on efforts to shut down Fannie and Freddie, which federal regulators seized three years ago with a taxpayer bailout now estimated to total about $150 billion.

Based on prevailing rates for a 30-year fixed-rate loan, a homeowner borrowing $200,000 would pay about $4,000 more if the loan were sold to Fannie or Freddie. That would raise the mortgage payment about $11 a month for the life of the loan.

"Housing doesn't need any more speed bumps, and this is a speed bump," said Jaret Seiberg, senior financial policy analyst at Guggenheim Partners in Washington. "It's not a big one, but every extra penny that it costs to finance a home puts that much more downward pressure on home prices."

The collapse of the housing market triggered the Great Recession and led to a wave of foreclosures as housing prices plummeted nationally. The market has been struggling to recover amid weak economic growth and high unemployment.

The fee may make a new loan unaffordable for some people, but the effect probably would be modest, said banking analyst Bert Ely of Alexandria, Va. The bigger effect will be on the government's ability to overhaul the housing finance system, which most analysts said is needed.

"This really complicates what you do with Fannie and Freddie down the road," Ely said.

The Obama administration and some analysts have called for Fannie Mae and Freddie Mac to raise their fees to make it easier for private companies to compete with them. Because Fannie and Freddie are owned by the government, investors view the mortgage-backed securities they create as safer investments than those offered by private firms.

David Stevens, president of the Mortgage Bankers Assn., said a fee increase would be fine — if the money were used to offset losses at Fannie and Freddie. But diverting the money to other government uses is a bad idea, he said.

"These institutions, which have been so costly to Americans and are so necessary to the housing recovery … should not be the piggy bank for future arbitrary tax policy," Stevens said.

"We understand the desire by Congress to extend the payroll tax [cut] because so many Americans are hurting right now," he said. "But the cost of that is going to be directly paid for by a whole other set of Americans who use Fannie Mae and Freddie Mac for their mortgages."

This month, the mortgage bankers group joined with the National Assn. of Home Builders and the National Assn. of Realtors in urging lawmakers not to use the fee to pay for the extension package.

He said the government reliance on long-term revenue from the firms seemed inconsistent with the need to end the conservatorship and overhaul the housing finance system.

The agency did not comment on the legislation, which President Obama quickly signed Friday.

The housing finance agency will announce soon when it will implement the fee, spokeswoman Corinne Russell said. The law allows the agency to phase in the fee over two years.

Congress and the White House agreed on the fee as a way to pay for the extensions without finding spending cuts or tax increases to offset the cost.

But some lawmakers criticized the money-raising move. Rep. Tom McClintock (R-Granite Bay) called it "atrocious public policy."

"It shifts the burden for this bill to future home buyers, kicks the housing market when it's already down, makes it that much more expensive for home buyers to reenter the market and adds to the pressures that have chronically depressed everyone's home values," he said.